Go try the public bath. Its a real experience plus many locals also go there.
200yen for towels. 100yen for soap. Entry is 440yen.
Or if you are short of time, there is a free foot onsen outside the bathouse. Also there is a mechanical clock outside the bathhouse. Everyhour little dolls will give a small performance.
A lot of restaurants around the area.
Easily accessible from Kagaonsen Station by CAN Bus. Yama(Mountian) route. 1day pass 1000yen.
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